The Mercedes-AMG GT 43 4MATIC+ is on display at the Brussels Motor Show on January 9, 2020 in Brussels, Belgium.
Sjoerd van der Waal | Getty Images News | Getty Images
Mercedes Benz Shares rose about 5% on Thursday after the German automaker beat fourth-quarter earnings expectations and announced a new stock buyback program, despite warning of “exceptional” risks in the coming year.
Fourth-quarter earnings before interest and tax (EBIT) were €4.33 billion ($4.7 billion), slightly ahead of consensus expectations, bringing the full-year figure to €19.66 billion. Revenues rose 2% in 2023 to 153.2 billion euros from 150 billion the previous year.
The group also announced an additional share buyback program worth up to €3 billion, with the repurchased shares subsequently cancelled.
However, Mercedes-Benz warned that supply chain bottlenecks for critical components remain a “significant risk factor” and said an “exceptional degree of uncertainty” surrounds geopolitical events and trade policy, particularly in the form of conflicts between Russia, Ukraine and the Middle East. And tensions between Western powers and China.
The company expects flat growth in 2024 as inflation and supply chain costs worsen, while the adjusted return on Mercedes-Benz vehicle sales is expected to decline to a range of 10%-12% from 12-14% in 2023.
Auto analysts at Jefferies said in an interactive note on Thursday that while there were no major earnings surprises, the cash dividend policy was “a sign of confidence and consistent with premium/luxury status, with buybacks to maintain EPS (earnings per share).” Increasing.”
Mercedes-Benz CEO Ola Källenius told CNBC on Thursday that the company is well positioned to weather various macroeconomic headwinds.
“Today we are reporting very strong numbers for Mercedes-Benz, and it is truly a banner year for our light commercial truck division,” he said.
Mercedes-Benz Vans revenue rose 18% year-on-year to €20.3 billion and adjusted EBIT rose 59% to €3.1 billion, while unit sales rose 8% to a record high of 447,800 units.
However, Kallenius noted that supply constraints impacted the company in the second half of 2023 and will continue to do so in the first quarter of 2024.
“But we are working on resolving that with our partner, and we are now working on providing more capabilities that have been prepared over the past months, so during this first quarter and at the end of it, I think we will work on resolving these issues, so in the second quarter we can return to the supply mode,” he added. More natural.
Although he acknowledged that the macroeconomic environment was “challenging” against the backdrop of escalating conflict and geopolitical tensions, coupled with persistently high interest rates and structural economic headwinds in China, Kallenius said Mercedes would not reduce its investment in future development.
“This does not mean that even though we are withdrawing from any particular market, we are always trying to exploit our maximum potential in the more than 150 countries in which we are active,” he told CNBC correspondent Annette Weisbach, adding that the company was not “peeling off” its investments either.
“In fact, we are at the highest level of investment in the company's history, as we prepare a completely new generation of products – some of which will be launched this year, but really an aggressive product especially on the battery electric vehicle side starting in 2025,” Kallenius said. It continues until 2026 and beyond.”
“So we are moving full speed ahead in terms of developing new technologies, innovations and a wide range of products for the coming years.”
